1. Field of the Invention
The present invention relates to investment portfolios, and more particularly, to protecting a future value of an investment portfolio.
2. Description of the Related Art
Principal protected mutual funds offer investors a guarantee of principal, adjusted for fund dividends and distributions, on a set future date (maturity) while providing exposure to, i.e., participation in, higher risk and higher expected return asset classes such as equities. These appealing properties have led to considerable interest on the part of investors who have invested billions of dollars in such mutual funds in recent years. The usefulness and attractiveness of these principal protected mutual funds is limited by three factors:    (1) These funds are closed to new contributions (i.e., investor share purchases) during their protected (or guarantee) periods, unlike most mutual funds, which are open to contributions as well as redemptions on an ongoing basis.    (2) These funds are limited to a maximum maturity that corresponds to the duration of the high grade zero-coupon bonds in which they can invest.    (3) These funds protect initial principal for those mutual fund shares that are held to maturity, but interim gains generated on such principal are not protected.
There is a need for an investment portfolio that is not constrained by these factors.